GilbertHolmes,
I think the idea has merit. What about the idea of also putting a proximity premium on commodity exports like coal and wood chips?
It will never happen though because it might disrupt the already precarious position global capitalism finds itself in. Under our current system Growth is the God that must be appeased at all costs, even our own well-being and survival.
I also like your notion that we are a "global society" that needs to act locally. We have to recognise that national borders are pure abstractions, ignored by global finance and ecology, but shored-up by jingoistic patriotism and ethical-parochialism. National borders are becoming thinner all the time in the light of global trade and environmental degredation. Maybe this "reality" will induce nationalists to accept the tax--a much more tangible notion of community and community-development and self-subsistence. Great thinking Gilbert!

Shadow Minister:
<What you proposed is wrong on so many levels that it would take several chapters to cover all the misconceptions.>

Dear SM,
maybe you could just sketch one or two of the misconceptions?

Ricardo’s argument was in the context of contemporary political argument between protectionists and free traders. The protectionists argued that tariff barriers make England economically better off. The classical economists demolished the protectionist arguments in a way that no-one has ever been able to refute. They showed that if the logic of protectionism were correct, and England were better off restricting trade with other nations, then for exactly the same reason counties within England would be better off restricting trade with other counties; and so on down to the town and household level. Reduced to its absurdity, we must conclude that people would be better of each working in isolation, and abandoning social co-operation.

Human society exists because labour in isolation is less productive – produces less output per unit of input – than labour in co-operation.

Any policy action directed against free trade is directed radically against the fundamental principle of human social co-operation. It purposes to impose an outcome that is ultimately less satisfactory to the people involved – that’s why it has to be imposed by force: because if people are free to choose, they tend not to voluntarily choose the less productive way.

GilbertHolmes does not refute the argument for free trade. He merely says: “Unfortunately, while it makes a lovely mathematical model, our lives do not actually fit well into the pattern.”

This is not a disproof. The whole point of Ricardo’s argument is that he has given the mathematical proof that free trade is mutually beneficial not only where A is better at producing good ‘a’ and B is better at producing good ‘b’, but where A is better at producing both.

“Instead of 'free trade', what we are actually looking for is balance.”
Who is “we”? Surely you don’t presume to speak on behalf of people who disagree with you?

Please define “balance”

GH
Well said on all fronts about the myth of 'free' trade. The whole concept is flawed on so many levels that it would take too many pages to cover on OLO.

One of the problems inherent in free trade is the idea that we can exploit another country's medieval workplace conditions to the benefit of the richer in the West. So we don't compete on quality but purely on the cost of labour. Often the end price is not cheaper for consumers meaning it is a good system for a small group of middleman.

It is important that nations be self-supporting as much as they are able in food supply and where they can control factors like governance, pesticide use etc. Nations should be able to choose what they import based on need not forced to accept goods they can well grow themselves.

Severin,

Some of the misconceptions:
Taxing inputs, say of machinery, discourages local production.
Indonesia is closer to Darwin than NSW. Do you tax products from NSW more highly than here?
Victoria does not grow bananas, thus there is no local production to support,

Etc.

On top of this the myriad complexities of the tax and policing it will cost much more than it generates, and will have the effect of closing local production, as they will lose their external markets, and efficiencies of scale from the retaliatory tariffs.

Etc.

*Nations should be able to choose what they import based on need not forced to accept goods they can well grow themselves.*

Nations are free to be members of the WTO or not. But the above
would be a disaster for a country like Australia.

For of course we are major exporters of meat. Based on your
thinking, other nations could easily reject our primary products,
whole industries in Australia would have to close down.

The Americans tried all this, when they put a limit on our lamb.
Americans arn't very good at growing lamb, its twice the price
of ours, its too fatty, so its too expensive. Result is that
few Americans eat lamb, pork chicken etc are cheaper.

Result was that American consumers lost and Australian farmers
lost. Now that the market has been reinstated, they love our
lamb and are our largest customer.

Perhaps it's best to just let consumers decide what they want to
buy or not. Everyone benefits, consumers and producers.

Your tax will be a reality before too long Gilbert.

It is called "peak oil" or maybe "Israel attacks Iran". The resulting rise in the price of oil will end the insane situation where it is cheaper to mine ore, coal, minerals etc and ship them halfway across the world to be processed into consumer goods then sent back halfway across the world and still be cheaper than something produced locally.

The alternative and the preferred policy of those in business and those on the right would be to reduce wages worldwide to the levels of Chinese workers and then we would all be competitive.

"Free Trade" was only ever a con that resulted in the decimation of western manufacturing and resulted in millions of jobs lost and hardship for working class people on both sides of the equation.